A facebook image of terror suspect Numan Haider. Photo / Facebook
The police greeted him cordially and offered to shake hands when the attacker struck without warning.
The man repeatedly stabbed the AFP officer in the face and upper body, police said, then attacked the Victoria police officer, who was wounded in the forearm before shooting the man dead with one shot.
"Our members had no inkling this individual posed a threat to them and as far as we were concerned it was going to be an amicable discussion about that individual's behaviour,' Victoria Police Assistant Commissioner Luke Cornelius said.
'It is also clear to us that (the) individual has, without any warning, produced a knife and assailed them with a knife,' he said. 'It's absolutely clear to us our members had no choice but to act in the way they did.'
Haider reportedly made a number of disparaging remarks about law enforcement agencies on his Facebook page, including calling them 'dogs'.
Another Facebook image showed the suspect in military colours with a mask over his head. Photo / Facebook
The federal police officer who was repeatedly stabbed has undergone surgery in Melbourne.
A Victoria Police officer who was also stabbed will have surgery on Wednesday.
Victoria Police chief commissioner Ken Lay said one of his officers had a nasty slash to his arm and would have surgery on Wednesday.
"We are a little worried about that. (It's) obviously not life-threatening but quite a serious injury," Mr Lay told Fairfax radio.
"Our Australian Federal Police colleague received more serious injuries. He underwent surgery last night. "He is in a serious but stable condition."
Mr Lay said the officers would get help to recover from the physical and mental trauma of the attack.
"These were two young men who turned up to work, doing their job, keeping their community safe, in a very very difficult environment, and came across a person who seemed to me to have one thing on his mind," Mr Lay said.
Police Association of Victoria secretary Ron Iddles declined to comment on specifics of the case but said police should be mindful of increased security concerns.
"All police need to be more vigilant," he said.
"The decision to use a firearm is never taken lightly and that police member will need to live with the consequences of that for the rest of his life."
Forensic police at the scene where a man was shot dead after stabbing two officers. Photo / Getty
Victoria Police Assistant Commissioner Luke Cornelius said the Victorian officer fired a single shot that killed the man.
"Our members had no inkling that this individual posed a threat to them," he told reporters at the scene early on Wednesday morning.
"It's absolutely clear to us that our members really had no choice other than to act in the way in which they did."
"The person in question was a known terror suspect who was a person of interest to law enforcement and intelligence agencies," Justice Minister Michael Keenan told reporters in Canberra this morning.
It appeared the shooting was in self-defence, he said.
"Whilst this is a horrible incident we do need to remain calm and go about our daily lives," the minister said.
AFP Commander Bruce Giles said the officers and the man had spoken cordially before the stabbing.
Forensic police hold an evidence bag at the scene where the terror suspect was shot dead. Photo / Getty
"The incident took place in the course of normal greetings; so, meeting with the individual, shaking hands, introducing and then the incident unfolded," he said.
He said it appeared the man had been acting alone.
Commander Giles confirmed there was information suggesting the man had recently been seen with a flag of the jihadist group ISIS, also known as Islamic State.
However, Commander Giles said the officers had wanted to speak to the man about a "routine" issue.
"Police had cause for concern," he said.
Neither police spokesman would comment on media reports that the man had made specific threats against Prime Minister Tony Abbott.
Mr Cornelius said police had not singled the man out.
"Where we see individuals behaving in a way which causes concern for public safety, we have to reach out to those individuals," he said.
Police would not confirm the man's name or occupation, or comment on suggestions he had recently had his passport cancelled.
Bomb squad members and police dogs scanned the scene, but Mr Cornelius said the measures were precautionary.
The homicide squad and professional standards officers are investigating.
- AAP, Daily Mail